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TRENDING
Sept. 2, 2024
Italy's Revised Tax Credit for Film Productions and AI Regulations
Italy revises international tax credit, maintaining headline 40% rate and banning relief for AI spend.
Italy - Italy has recently revised its
international tax credit for film productions, maintaining the headline 40%
relief rate while introducing new regulations concerning the use of artificial
intelligence (AI). This update was announced at the Venice Film Festival by
Lucia Borgonzoni, undersecretary of state to the Ministry of Culture, and
Nicola Borelli, head of the Directorate General for Cinema and Audiovisual at
the Italian Ministry of Culture.
The 40% tax credit applies to production expenditures
in Italy that meet a minimum threshold of €250,000. However, for specific
above-the-line costs related to non-European entities, the rate is reduced to
30%. This move aims to continue attracting international productions to Italy,
which has seen significant investment since the tax credit’s inception in 2017,
reportedly bringing in around €2 billion.
A notable change in the revised tax credit is the
exclusion of costs related to AI, except for those used in special effects.
Productions must disclose if AI has been utilized in any work conducted in
Italy. Additionally, contracts between Italian production or post-production
companies and authors or performers must include clauses allowing them to opt
out of having their work, image, or performance exploited by AI systems.
The revised tax credit remains available up to a
maximum annual limit of €20 million per company or group of companies, with no
maximum limit per individual work. This ensures that larger productions can
still benefit significantly from the tax credit without hitting a cap too
quickly.
These changes reflect Italy’s commitment to supporting
the film industry while addressing the ethical and economic implications of AI
in production. The new rules are expected to provide clarity and stability for
international producers, who have faced delays and uncertainties regarding the
tax credit guidelines for 2024.
Italy’s revised tax credit aims to balance the
attraction of international productions with the need to regulate emerging
technologies like AI, ensuring a fair and transparent environment for all
stakeholders involved.
